NBC Sports Network has partnered with the World Series of Fighting (WSF) in 2012 resulting in mixed results and a lot of learning experiences. According to John Ourand’s article with the Sports Business Journal the WSF was trying to “punch above it’s weight.” Under new ownership, the WSF has been renamed to the Professional Fighters League (PFL).

What differentiates the PFL from other promotional companies like Bellator and the UFC is that the fights will be run like a league with schedules and a playoff at the end of the first year.

Facebook will be streaming all fights that are not picked up by NBCSN as well as having a pre and post-fight show.

Ringside Analysis:

The most common argument that professional leagues and team owners made in opposition to the legalization of sports betting is that sports betting would ruin the integrity of the game. Billions of dollars are wagered on sports illegally without sports being tainted, so this claim largely was a public relations move. Recently, with the United States Supreme Court looking at whether theProfessional and Amateur Sports Protection Act of 1992 (PASPA) is constitutional, team owners and league commissioners are softening their stances on sports betting or actively pursuing its legalization.

Dallas Cowboys owner Jerry Jones said:

Jerry Jones on the sports betting issue and the Supreme Court, "I don't see that gaming compromises the integrity of the game." https://t.co/2PVVv69HdX

NBA Commissioner Dan Silver said in 2014 that he was in favor for the legalization of sports betting. In 2016, former NBA Commissioner David Stern, who was steadfast against the legalization of sports betting when he was the active commissioner, has since changed his mind saying, “Over time, I’ve come to accept the notion that a properly run gambling operation, or gaming as we like to say in Las Vegas, is protective and not deleterious to the health of sports.”

Ringside Analysis:

The NFL had to come to terms with sports betting most recently when the Raiders decided to move from Oakland to Las Vegas. Goodell and other owners had been against a NFL team in Vegas because of the obvious connections to sports betting. But even leading up to the official announcement Goodell’s stance on sports betting seemed to soften. He said that there would be a benefit to regulating sports betting, which would only happen the way he discussed it if it were legalized nation-wide, even though the league still opposes sports betting. The NFL will also not ask for sports books to not take bets on Raiders games. A canary in the coal mine moment was when ESPN was able to post betting lines on NFL games. That may not seem like a big deal but the NFL once pulled media as part of an effort to get ESPN to cancel a show called “Playmakers” that painted professional football in a fictitious league as detrimental to the NFL.

ESPN has been consistently losing subscribers on a monthly basis and with $24 billion wrapped up in television rights contracts for the next few years the worldwide leader needed a boost. Fights like Vasyl Lomachenko’s win over Guillermo Rigondeaux that beat out UFC programming on FS1 in the younger demographics is exactly what the broadcast company needed.

TopRank boxing and ESPN are four months into their four year contract and ESPN is currently paying more for a single Monday Night Football game than they are for the entire partnership with Top Rank, according to Kevin Draper with the New York Times.

The Creative Arts Agency (CAA) is managing the sales for advertisers and sponsorships. Creating revenue through advertisers and sponsors will be essential to make up for missing out on PPV revenue if the biggest fights and fighters are to remain on basic cable.

Ringside Analysis:

There are a few important takeaways from this article. First, it seems that Top Rank has learned from the Premier Boxing Champions (PBC) mistake. The PBC sought to buy air time on sports networks and sell the rights themselves, then after a few years sell the rights for the events back to the networks they had previously bought air time from. However, those results have likely not come to fruition the way the PBC thought and the partnership between Top Rank and ESPN may be a better route to go. Networks will promote much more often if they have some skin in the game. One example that Draper points out is that NHL coverage on ESPN dropped after the network was no longer pay the rights fees to broadcast the league.

Showtime has announced that Mayweather-McGregor earned 4.3 million PPV buys in the US. The network also stated that the fight generated $600 million in total revenue.

The 4.3 million figure is well below what Dana White has stated in the past, which means that the 6.5 million buys White references must be including international buys.

Mayweather-McGregor is second to Mayweather-Pacquiao with PPV buys, MayPac generated 4.6 million buys, and gate revenue, MayPac generated $72,198,500. Mayweather’s fight with McGregor on August 26th generated $55,414,865.79 in sales.

“The pairing of Floyd Mayweather and Conor McGregor brought together two very significant and distinct global fan bases in one truly unprecedented event… The remarkable results are all the more impressive considering that the planning, marketing and execution took place across a span of just 72 days from the initial announcement to fight night. Together Showtime and Mayweather have now accounted for the three highest grossing pay-per-view events of all time.”

Ringside Analysis:

The primary goal of this fight was to make everyone involved a lot of money. Mission accomplished.

The marketing for the event included a world press tour that got ugly at times, an All Access series that has always preceded Mayweather fights aired on Showtime, and plenty of commercials on sports networks. What is unique about this boxing event is that the UFC also helped sell the event.

Vasyl Lomachenko’s fight with Guillermo Rigondeaux set ratings records. The fight drew 1.73 million viewers, making it the second most-watched fight of 2017. Pacquiao-Horn, which took place in July of 2017 and averaged 2.8 million views but peaked at 4.4 million, remains the highest-rated boxing match on cable this year.

This boxing event went head-to-head with the UFC running an event on FS1 and Nielsen ratings indicate that the boxing event drew more viewers. Brian Ortega’s win over Cub Swanson in the octagon earned 870,000 viewers. The boxing event benefitted from the Heisman Trophy Ceremony preceding it, but Lomachenko-Rigondeaux actually drew more viewers than the ceremony.

Negotiations for the UFC media rights are underway and the first offer from FOX is well below what WME-IMG valued them at. WME-IMG CEO Ari Emanuel was one of the key negotiators between FOX and UFC for the first media rights deal so he had a good idea going into this next negotiation window what the right value for the rights in 2018 should be. However, the live sports media rights market has been cooling over the last few years as subscriptions to ESPN have decreased and people are regularly cutting the cord on their TV and going with streaming-only options.

The current agreement runs through 2018 and more offers will come in but the UFC will also be competing against other live sports options, like the WWE, which has good ratings and some overlap in demographics. Companies like Amazon have also become a bigger player in live sports. Amazon has media rights to the NFL and Jeff Bezos direction with the company is pointing towards creating new, exclusive streaming content that people will pay for, therefore becoming Amazon Prime members.

At the start of 2017 the media fees paid to the UFC will be $160 million, after being $115 million a year when the deal first began in 2011.

On the same podcast that Dana White said that the future of the UFC’s broadcast rights could be on a digital platform, the President of the UFC also said that one day boxing could be under the umbrella of the UFC.

Rumors first began that Dana White was going to expand into boxing last summer. While promoting Mayweather-McGregor, White wore a shirt that said “Zuffa Boxing.” White said that he has no plans to leave the UFC because it is his passion. He also says that he is still under contract and can’t leave per the rules in the contract for WME-IMG acquiring the UFC.

Ringside Analysis

Dana White is a former amateur boxer, boxing trainer, and boxing fan. When he partnered with the Fertitta brothers to take over the UFC and push it to its $4 billion sale he thought he could make a fight promotion company that avoided the mistakes boxing did. He has already begun to obtain a promoter’s license.

Some believe that this is a sign that White and the UFC think that the market is softening on MMA and it is time to expand into something that is going to be more lucrative. I view the expansion into boxing as a way to promote fighters in forms of martial arts they have mastered and also into new revenue streams. While MMA may be a more long-term mainstream sport, the UFC could also expand into niches like boxing or muay thai. Mayweather-McGregor has shown that there is a strong desire for cross-over competition if the personalities are right. In a way, the UFC could really be moving back to its roots of matching wrestlers with kung fu masters.

The UFC is expanding into its first fight in mainland China at the end of this month, is looking for a big increase in revenue for their next broadcast rights, and are getting more international sponsors than they have before. What the UFC is today could be a fraction of what it is in the next 10 years.

On The Unnamed Podvideocast with Jason Gay, Dana White said that instead of going with a traditional network for the UFC’s next broadcast deal the MMA company could instead use a digital platform. White says that with the declining subscriptions to ESPN and seeing his own kids prefer digital devices to television that the future is with digital, over the top (OTT) platforms.

Dana White says:

“I think where you really see it is, look at ESPN… Look at how powerful ESPN was five years ago, what they were getting per sub. Their subs are dropping. They’re scrambling to figure it out right now.”

“There’s no doubt that the internet and OTT is where it’s all going. So, it’ll be interesting to see when the smoke clears who’s still around and who’s not.”

ESPN once considered buying the media rights to the UFC and was rumored to be interested in buying the UFC before WME-IMG, but decided to pass. The World Wide Leader in Sports has also been aggressively pushing its own app with a streaming service starting in 2018. The ESPN streaming service will feature Top Rank Boxing.

The UFC already has an OTT service called Fight Pass but this new service would be much more comprehensive in terms of live events.

A distinction between the UFC and other organizations like the NFL is made on the podcast. The NFL doesn’t produce its own events. Networks like FOX and CBS produce the events for broadcast. The UFC produces all of its own events regardless of whether a given event is for PPV or if it is for Spike.

Ringside Analysis:

Every sports organization from the MLB to the NFL to NCAA Football is looking for ways to speed up games and make them fit into a smaller, more convenient time frame. Very few people have enough time for three and a half hour football and baseball games. Dana White says that the UFC is one of the best positioned sports for the future:

“Fighting, it works everywhere, all across the planet,” White said. “Now with technology, we’re getting to the point I always dreamed about. I always used to say, ‘We’ll take this thing all around the world, build a fanbase, build some talent in every country around the world and then we’ll get to a point in time where everybody can watch it at the same time — on the same platform.’ We’re getting to that day.”

The UFC may look to split up broadcast rights to traditional distribution channels, like television, and digital streaming.

Showtime Sports Executive VP and GM says that he will be reaching out to the UFC about being broadcast partners. The UFC’s broadcast agreement with FOX is coming to a close and if the network and the UFC cannot reach an agreement on a new broadcast deal then companies like CBS, Showtime, HBO, or NBC may bid high enough to be the main broadcaster in the future.

Dana White was critical of Showtime with how it handled Strikeforce but praised the network after the UFC and Showtime worked together on the Mayweather-McGregor fight.

Ringside Analysis:

Showtime and HBO use boxing to get subscribers. The new subscribers who want to watch a fight hopefully end up finding a new favorite TV show or the movies that the network airs and eventually become full-time subscribers. However, while Showtime and HBO pay the promoter for the rights to each fight, making for an easy revenue stream for the promoters, it limits the exposure of the fights and fighters. Because people have to pay extra to watch a fight it is likely that most will opt to watch a basketball or baseball game on ESPN, a channel they already get, instead of paying a monthly fee for a new, premium channel. Maybe Showtime will get the more popular fights on their network, but that would probably require a hefty price tag. CBS would be a big player to help promote the UFC but access to the network may not be in the cards for this broadcast agreement.

UFC Lightweight Champion Conor McGregor has not stated whether his next fight will be a MMA match or a boxing match, but before he does another fight in the UFC he demands to be a co-promoter. At the debut of his biopic, McGregor was asked about his next fight. He said that Tony Ferguson was a likely opponent in the UFC but also that a few boxing matches were possible and that discussions were open.

Conor McGregor said:

“I was promoter on the Mayweather fight, and we’re in current negotiations… I ain’t stepping in that octagon again unless I’m part owner of the whole setup – I’m a promoter.”

“We’re in the contract negotiation stage. It’s got to, they’ve got to entice me now because, I came from a billion-dollar fight. I want equity, I want pay-per-view. I want to be a true partner. You have to entice me now. I want to be a partner. I want to be a promoter and I want to be a fighter for me to continue.”

Conor McGregor has asked for part ownership in the UFC before. When the UFC was first sold to WME-IMG he wondered why he was excluded from any ownership in the company while WME-IMG sold off shares to celebrities in other sports and entertainment, like Tom Brady.

McGregor was technically a co-promoter in his fight against Mayweather but Zuffa later was legally required to be listed as a promoter in the fight so that they could pay Conor McGregor.

Dana White responded saying:

Dana White basically says that Conor McGregor is such an international draw that they are going to make some exceptions for him. White also says that Conor McGregor is easy to do deals with and is also a huge asset to the company because he is willing to fight anyone at nearly any time.

Ringside Analysis:

I don’t think in an ideal world that the UFC would ever have a co-promoter because they don’t want to put any other company on par with the UFC. The UFC has placed a lot of emphasis, especially since Zuffa first bought the company, about establishing the UFC brand. The UFC is nearly synonymous with MMA but acts more as the NFL. NFL Commissioner Roger Goodell said that one of his responsibilities is to “protect the shield” and the previous owners, with White, defended the UFC passionately.

The UFC has made exceptions for Conor McGregor before. In the past the UFC hasn’t let fighters compete outside of the UFC in other sports but they let McGregor fight Mayweather. McGregor made a lot of money for himself, WME-IMG, and also did a lot of promoting for the UFC. The UFC had a rule against fighters holding belts in two different weight classes. Conor McGregor won the UFC Lightweight Championship while simultaneously holding the UFC Featherweight Championship.

Part of me is wondering if the UFC is killing the golden goose by giving so much power to McGregor. It is unlikely, but certainly possible, that the UFC is giving Conor McGregor what he wants because now McGregor knows how much money he could be making boxing or fighting as an independent MMA fighter and running his own shows, taking fighters from other MMA promotional companies. The UFC has been behind in revenue goals for the last year and I hope that the short term money they’re chasing now, which remind me of some of the mistakes boxing made in its decline, don’t hurt the long-term success of the UFC.